Oil
Exchange, rising interest rates gives marketers fuel importation concern as scarcity bites harder
LAGOS-THE lingering fuel scarcity in major cities and towns across Nigeria has continued to bite harder in the day two of intensive long queues and search for fuel in petrol/ gas stations nationwide even as the high exchange and interest rate has been fingered for being responsible for the oil marketers low interest in oil importation.
Entrances to many filling stations in Lagos and other parts of the country remained shut to motorists on Sunday following a sharp drop in the supply of petrol to the market even as those selling on Monday (today) were besieged with massive queues.
This development is coming on the heels of revelations that oil marketers were no longer interested in importing the product mainly because of the rising exchange rate of the dollar to the Naira.
The other factors responsible for the marketers’ action are delayed subsidy payments and rising interests on loans from banks.
An official of a major marketing firm, who declined to have his name in print, said, “I am afraid that we cannot continue to import petrol because it costs more now to do so owing to the recent devaluation of the Naira. The rising amount of petrol subsidy arrears payable to us coupled with the high interests on loans from financial institutions, are still major issues in our hands.”
Another marketer told one of our correspondents that an exchange rate of N226 per dollar was demanded on import duties contrary to the inter-bank exchange rate of N198 posted on the website of the Petroleum Products Pricing Regulatory Agency for the pricing template of PMS approved on February 19, 2015.
The major marketers import close to 60 per cent of petrol consumed in the country while the Nigerian National Petroleum Corporation imports the balance.
Our correspondents observed on Sunday that the states hit badly by scarcity of petrol were Lagos, Ogun, Oyo, Bayelsa, Ondo, Ekiti, Kaduna, Delta, Plateau, Akwa-Ibom. Abuja, the nation’s capital, appeared to be the worst hit by the shortage.
The Chairman, Nigeria Union of Petroleum and Natural Gas Workers, Lagos Zone, Alhaji Tokunbo Korodo, said the depots did not have enough products to serve filling stations across the country.
“If there were enough to go round, tanker drivers, of course, would move products to the areas of need. Nigerians should not be surprised that this is happening now. It is really unfortunate,” he said.
In Lagos, many filling stations did not sell petrol but those that were open for business had long queues of motorists to contend with.
Although their pump prices remained N87 per litre, black market operators sold 10 litres for N1,200, i.e N120 per litre.
Drivers of commercial buses capitalised on the situation to increase their fares. For instance, fare for Ojodu-Berger to Magboro, which hitherto was N50, was N100 on Sunday.
One motorist told one of our correspondents in Lagos that, “If our fuel finishes now, we will go and queue to get another fuel. Now that we have fuel, passengers would have to pay more until the situation improves.
It was a Herculean task for motorists in Sango-Ota, Ijebu Ode and Abeokuta in Ogun State to purchase petrol from the stations.
Although most of the stations sold petrol at the regulated price of N87 per litre, the Oando Filling Station in Ijoko, Ota sold it for N100.
A motorist, who bought from the said station demanded for and was issued a receipt which she forwarded to one of our correspondents.
In Ibadan, Oyo State, one of our correspondents had learnt on Friday that the scarcity was due to unsubstantiated information that petrol price would go down to N65 per litre.
A manager at one of the stations in the Mokola area of the city, said the rumour seemed to be gaining ground and that the marketers were studying the situation.
He said, “No businessman wants to run at a loss. The product we have now was purchased at the old price. We have not added any price to the stipulated N87 per litre of petrol but the queue is long because many people are not sure of the availability of the product in a few day’s time or why some fuel stations are not selling.
“Those who are not selling must have exhausted their product and are unwilling to buy more at the old price because of the fear that the rumour of a new price of N65 per litre could be true. If we buy today at the current price and government slashes price tomorrow, who pays for the deficit?”
The situation was the same in Ado Ekiti, Ekiti State on Sunday as many filling stations rationed the product.
A station along Adebayo Road which on Saturday sold the product for only two hours in the evening and did not on Sunday.
Motorists and commercial transport operators went to the hinterland where petrol sold at a higher price but readily available. The price ranged between N100 and N105 per litre.
The shortage which was noticeable in Warri, Sapele, Ughelli and other parts of Delta State thinned out on Sunday.
But the pump price of the product remained high in Asaba as motorists paid between N95 and N100 per litre.
The attendants said the directive to sell at prices higher than N87 was given by their bosses, who they said claimed to have bought the product at a higher price .
The scarcity in Ondo State which began on Thursday worsened on Sunday. Petrol also sold for between N95 and N110 per litre in filling stations that were operational.
Checks by our correspondent in the state showed that most of the stations were still locked .
The Chairman, Independent Marketers Branch, Nigeria Union of Petroleum and Natural Gas Workers, Ore, Mr. Olakunle Ajulo, attributed the scarcity to the failure of government to pay subsidy claims.
He expressed hope that the matter would soon be resolved as stakeholders were already tackling the issue.
Ajulo blamed the shortage in Ondo and Ekiti states on the fact that the Ore Depot was not functioning.
There was also scarcity in Yenagoa, Bayelsa State. Apart from a few filling stations and the NNPC mega filling stations, others did not sell the product.
The product also sold for between N110 and N120 per litre in Jos, Bukuru and its environs in Plateau State.
An attendant at one of the stations, who identified herself as Yeni, said, “We have product, but the manager asked us to lock up the station.”
Many filling stations in Uyo, Akwa Ibom on Sunday were selling petrol at N110 per litre as against N140 to N150 per litre which was prevalent price for a litre of fuel last week.
Motorists and commuters in Kaduna State continued to groan in pain in the wake of fuel scarcity that hit the metropolis and its environs since Friday.
The Group General Manager, Group Public Affairs Division of the NNPC, Ohi Alegbe, told our correspondent on the telephone that the Federal Government had injected fresh 680 million litres of petrol to boost the product supply base.
He said the effect of the injection which was done at the weekend would be felt from Monday(today) even if nothing was felt at the level of monitoring earlier tod.
He advised Nigerians to desist from panic buying of petrol because there was no need for such.
Meanwhile, the Presidential Campaign of the All Progressives Congress has said that the return of queues at filling stations is a confirmation that the policies of the Goodluck Jonathan administration are founded on deceit and insincerity.
According to the APC campaign, it is now evident that the recent reduction in cost of petrol was borne out of political expediency, rather than compassion.
It also condemned the poor electricity supply across the country by power firms, describing it as a sad reminder of the failure of the PDP-led Federal Government.
The group, in a statement by its Director of Media and Publicity, Mallam Garba Shehu, wondered how a political party which has been in power for 16 years, could still feel confident to seek another term in office.
The statement partly read,“The issue is that being unable to set up even one new refinery in the past five years and unable to get existing refineries to function up to 50 per cent capacity, the people of Nigeria surely need another set of people to be in charge of affairs.
Oil
FG Introduces New Incentives To Revitalize Nigeria’s Oil & Gas Industry
In a strategic move to revitalize Nigeria’s oil and gas sector, the Federal Government has unveiled two key fiscal incentives aimed at attracting investment and enhancing energy security.
The announcement was made by Mr. Wale Edun, the Minister of Finance and Coordinating Minister of the Economy on Wednesday.
The first initiative, the Value Added Tax (VAT) Modification Order 2024, introduces critical exemptions for essential energy products and infrastructure, including Diesel, Feed Gas, Liquefied Petroleum Gas (LPG), Compressed Natural Gas (CNG), Electric Vehicles, Liquefied Natural Gas (LNG) infrastructure, and Clean Cooking Equipment.
Read Also: Atiku Calls For Rotational Presidency Across Nigeria’s Geopolitical Zones
These exemptions are designed to reduce living costs for Nigerians, promote energy security, and accelerate the transition to cleaner energy alternatives.
The second initiative, the Notice of Tax Incentives for Deep Offshore Oil & Gas Production, offers new tax relief options for deep offshore exploration projects.
This measure aims to position Nigeria’s deep offshore basin as a premier destination for international oil and gas investments, boosting the country’s appeal to foreign investors.
These reforms are part of a broader set of policy initiatives, known as Policy Directives 40-42, endorsed by President Bola Ahmed Tinubu.
The directives reflect the administration’s commitment to fostering sustainable development in the energy sector and enhancing Nigeria’s competitive edge in the global oil and gas market.
Business
Tinubu set to approve ExxonMobil-Seplat oil deal, expands CNG bus initiative
By Yemie Adeoye
NIGERIA’s President Bola Tinubu has announced that the protracted ExxonMobil-Seplat upstream oil divestment will be formally approved by the Minister of petroleum within a matter of days, just as he announced his government’s intention to expand the Compress natural Gas, CNG buses initiative.
The President who stated this during his Independence day nationwide broadcast stated that the move is in line with his administration’s commitment to free enterprise, free entry and free exit in investments which is the hallmark of his administration investment policy.
“Fellow compatriots, our administration is committed to free enterprise, free entry, and free exit in investments while maintaining the sanctity and efficacy of our regulatory processes. This principle guides the divestment transactions in our upstream petroleum sector, where we are committed to changing the fortune positively. As such, the ExxonMobil Seplat divestment will receive ministerial approval in a matter of days, having been concluded by the regulator, NUPRC, in line with the Petroleum Industry Act, PIA. This was done in the same manner as other qualified divestments approved in the sector.”
The President also seized the opportunity to plead with Nigerians to be patient with his administration’s reform policies. “As your President, I assure you that we are committed to finding sustainable solutions to alleviate the suffering of our citizens. Once again, I plead for your patience as the reforms we are implementing show positive signs, and we are beginning to see light at the end of the tunnel”.
“Our energy transition programme is on course. We are expanding the adoption of the Presidential Initiative on Compressed Natural Gas for mass transit with private sector players. The Federal Government is ready to assist the thirty-six States and FCT in acquiring CNG buses for cheaper public transportation.
Fellow Nigerians, while we are working to stabilise the economy and secure the country, we also seek to foster national unity and build social harmony and cohesion. Our economy can only thrive when there is peace”. he enthused.
Oil
ExxonMobil To Invest $10bn In Nigeria’s Deep-Water Oil Operations
As part of the administration’s push to improve Ease of Doing Business (EoDB), Nigeria’s Vice President Kashim Shettima has expressed support for ExxonMobil’s plan to invest $10 billion in the country’s deep-water oil sector.
Speaking on Wednesday, September 25, 2024, during a meeting with ExxonMobil executives at the 79th United Nations General Assembly (UNGA) in New York, Shettima called the investment “a clear testament to the administration’s economic reforms and investor-friendly policies.”
Read Also: Offset Accuses Cardi B Of Cheating During Pregnancy
This announcement follows news that international maritime company DP World intends to develop a multibillion-dollar port project in Nigeria.
Stanley Nkwocha, Senior Special Assistant to the President on Media and Communications, shared the development in a statement on Wednesday. He quoted Shettima as saying: “ExxonMobil’s potential investment aligns with the vision of President Bola Ahmed Tinubu’s administration for a more investment-friendly Nigeria.
We are committed to fostering an environment that supports such transformative projects.”Shettima also discussed the administration’s broader efforts to improve the ease of doing business, highlighting the “Renewed Hope Agenda,” which aims to simplify bureaucratic processes, enhance transparency, and offer fiscal incentives to attract global investors.
“Our administration has taken bold steps to unify the exchange rate, remove fuel subsidies, and implement tax reforms. These measures, though challenging in the short term, are intended to create a stable and predictable business environment in the long term,” he added.
On the oil and gas sector, Shettima mentioned that the government is revising the fiscal framework for deep-water operations to attract investment while ensuring fair returns for the Nigerian people.